Telephone Consumer Protection Act Advocacy Update

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1 Telephone Consumer Protection Act Advocacy Update 2014 National Council of Higher Education Resources (NCHER) Knowledge Symposium November 4, 2014 Jason Goldman Senior Telecommunications Policy Counsel and Managing Director Environment, Technology & Regulatory Affairs Division U.S. Chamber of Commerce 1

2 Background on the Telephone Consumer Protection Act (TCPA) 2

3 TCPA Was Passed 23 Years Ago In response to complaints about unwanted phone calls, especially during dinner time, Congress passed the Telephone Consumer Protection Act (TCPA) in Computer telephone calls are invading our homes and destroying our privacy.they wake us up in the morning; they interrupt our dinner at night; they force the sick and elderly out of bed; they hound us until we want to rip the telephone right out of the wall. These machines are out of control.[i]t has got to stop. Sen. Ernest Fritz Hollings (D-SC) Source: 137 Cong. Rec. S16204 at *S16205 S16206, 1991 WL (Nov. 7, 1991) (Remarks of Sen. E. Hollings) 3

4 How Technology Looked in 1991 At the time the TCPA was passed, cellphones resembled bricks and were often connected to a bag. Wireless phones were a luxury item and the landline was the dominant consumer telecommunications device. 4

5 TCPA Restrictions on Calls to Cell Phones Thus, certain restrictions in the TCPA are only applicable to calls made to cell phones. Specifically, the TCPA prohibits the use of an automatic telephone dialing system (ATDS) to call or send texts to mobile phones without the consent of the recipient. 5

6 TCPA Restrictions on Calls to Cell Phones SEC [47 U.S.C. 227] RESTRICTIONS ON THE USE OF TELEPHONE EQUIPMENT (b) Restrictions on use of automated telephone equipment (1) Prohibitions It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States (A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice (iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call. 6

7 TCPA Restrictions on Calls to Cell Phones SEC [47 U.S.C. 227] RESTRICTIONS ON THE USE OF TELEPHONE EQUIPMENT (continued) (a) DEFINITIONS. As used in this section (1) The term automatic telephone dialing system means equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers. 7

8 Statutory Damages for TCPA Non-Compliance TCPA provides that a consumer can receive $500 per call for a negligent violation and up to $ per call for a willful violation. Damages are assessed per call or text message. The TCPA does not include a cap on statutory damages. 8

9 Why Does the TCPA Need to be Updated? 9

10 Wireless Usage has Changed Dramatically In today s mobile world, consumers expect and demand important information instantly no matter when or where they are located. There have been more U.S. wireless subscribers than residents since 2011, according to CTIA-The Wireless Association. 10

11 Wireless Usage has Changed Dramatically According to a recent CDC National Center for Health Statistics' report, in the second half of 2013: % of U.S. households were wireless-only. - An additional 16.1% were wireless-mostly (i.e., the household has a landline but receives all or most calls on a wireless phone). - Thus, 57.1 percent of U.S. households rely either exclusively or predominantly on wireless telephone service. Source: Stephen J. Blumberg & Julian V. Luke, Div. of Health Interview Statistics, Nat l Ctr. for Health Statistics, Centers for Disease Control and Prevention, Wireless Substitution: Early Release of Estimates From the National Health Interview Survey, July December 2013, at 1 (July 2014). 11

12 TCPA Litigation is Surging At the time the TCPA was created, its sponsor, Sen. Hollings explained the law was intended to facilitate actions in state small claims courts, which involve smaller sums and often do not require (or even allow) the participation of attorneys. But today, TCPA cases are anything but small. Trial lawyers have used the law to file large class action lawsuits. 12

13 TCPA Litigation is Surging The defendants in these cases are no longer just abusive telemarketers. They are businesses, big and small alike, forced to decide whether to reach a settlement with the plaintiff s counsel or to accept the risk and spend significant resources defending itself against an action where the alleged statutory damages may be in the millions or even billions of dollars. 13

14 TCPA Litigation Statistics 1,908 TCPA lawsuits have been filed in 2014 (as of 9/30), an increase of 29.9% over the same period last year. 24 (13.6%) of the 193 TCPA lawsuits filed in September 2014, were class actions. Number of Cases ,101 1,862 1,908 Source: Debt Collection Litigation & CFPB Complaint Statistics, September 2014, WebRecon LLC, Oct. 17, 2014, available at and Debt Collection Litigation & CFPB Complaint Statistics, December 2013 & Year in Review, WebRecon LLC, Jan. 22, 2014, available at 14

15 TCPA Litigation Statistics 15

16 Current Status of Advocacy for TCPA Update 16

17 TCPA Advocacy Update As wireless devices and services become even more prevalent in our society and TCPA litigation continues to skyrocket, we have seen more and more petitions (currently over 50) filed at the FCC seeking clarification by the agency of its TCPA rules. Examples of common issues raised in the petitions: - Definition of autodialer; Definition of capacity (hypothetical vs. current); Definition of called party; and Reassigned/wrongly dialed numbers. 17

18 TCPA Advocacy Update At the FCC and on Capitol Hill, the Chamber has argued the FCC should issue clarifying rules and, if necessary, commence a rulemaking proceeding. In the short term, the FCC needs to act to: - Bring regulatory certainty to the business community; and - Stem the tsunami of class action TCPA lawsuits driven not by aggrieved consumers, but by the opportunist plaintiffs firms taking advantage of uncertainty in the law to rake in attorney fees. In the long term, statutory changes to the TCPA are necessary. 18

19 Additional Resources U.S. Chamber TCPA Web page. U.S. Chamber Institute for Legal Reform paper on TCPA litigation: 19

20 Jason Goldman Senior Telecommunications Policy Counsel and Managing Director Visit our website at and Follow us on 20

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